AAR Q1 Earnings Surpass Estimates, Sales Increase Year Over Year

Core Insights - AAR Corp. reported first-quarter fiscal 2025 adjusted earnings of 85 cents per share, exceeding the Zacks Consensus Estimate of 82 cents by 3.7% and improving 9% from the previous year [1] - The company generated net sales of $661.7 million, surpassing the Zacks Consensus Estimate of$ 646 million by 2.5% and increasing 20.4% from $549.7 million in the year-ago quarter [2] Financial Performance - GAAP earnings per share (EPS) were 50 cents, compared to a loss of 2 cents in the prior-year quarter [1] - The gross profit margin decreased by 70 basis points to 17.7% from the prior-year quarter [4] - Adjusted operating margin increased from 7.3% to 9.1%, driven by contributions from the recently acquired Product Support business [4] Sales Breakdown - Parts Supply segment sales totaled$ 249.7 million, up 5.4% year over year [3] - Repair & engineering sales reached $217.6 million, a significant increase of 58.3% from the prior-year period [3] - Integrated solutions sales amounted to$ 168.9 million, up 8.1% from the year-ago quarter [3] - Expeditionary Services recorded sales of $25.5 million, reflecting a 33.5% year-over-year increase [3] Operational Updates - Selling, general and administrative expenses were$ 75.9 million, compared to $74.7 million a year ago [4] - Net interest expense for the quarter was$ 18.3 million, up from $5.4 million in the year-ago period [4] Cash and Debt Position - As of August 31, 2024, cash and cash equivalents were$ 49.3 million, down from $85.8 million as of May 31, 2024 [5] - Long-term debt totaled$ 981 million, a decrease from $985.4 million as of May 31, 2024 [5] - Net cash outflow from operating activities was$ 18.6 million, compared to $18.7 million in the year-ago period [5]